Question
Walker Towel & Linen Shop uses the lower of cost or NRV method and has a periodic inventory system. Additional information follows: Inventory Date Cost
Walker Towel & Linen Shop uses the lower of cost or NRV method and has a periodic inventory system. Additional information follows:
| Inventory | ||
| Date | Cost | NRV |
| January 1, 2019 | $4,600 | $4,000 |
| December 31, 2019 | 6,000 | 5,000 |
| December 31, 2020 | 9,000 | 8,200 |
Required:
a. If the direct method of recording the reduction of inventory to NRV is in use, what would be the amount of the debit to Inventory on December 31, 2020? $fill in the blank 1
b. If the allowance method is in use, what would be the debit to Income Summary on December 31, 2019?
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Fundamental accounting principle
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
21st edition
1259119831, 9781259311703, 978-1259119835, 1259311708, 978-0078025587
